SAN ISIDRO COLLEGE

City of Malaybalay
Tel No. 088-813-5541
Website: sic.edu.ph
Webmail: info@sic.edu.ph

OAC106 Entrepreneurial Characteristics and Competencies Mr. Jiemarie D. Paderes

(Course Code) (Course Tittle) (Name of Instructor)

I. Learning Module 5 Business Plan Overview

(Topic)

II. Introduction
Greetings! Good morning, everyone! Praised be Jesus and Mary! Welcome to module. You
will find here our general instructional guidelines, then the components of our module. You
will be guided one step at a time through the specific instructions of the learning tasks given
below, which intend you to understand the business plan. Let joy and peace abound in your
mind and heart as you genuinely and responsibly respond to the learning processes that this
module offers

III. Intended Learning Outcomes (ILOs)

a. Describe the different parts of business plan
b. Formulate the business plan
c. Fully discuss the stages in the business set-up process

IV. Stimulating Recall

1. Why we need to do a business planning?

V. Presentation of the topic/learning material

Business Plan Overview
1. Writing a Business Plan
2. Basic Phasis of Business Plan
3. General Format of a Comprehensive Business Plan
4. Micro Business Plan
5. Description of the Target Market
6. Categories of Consumers
7. Market Need Analysis
8. Sample Business Plan
 BUSINESS PLAN OVERVIEW

WRITING A BUSINESS PLAN

A business plan is an entrepreneur's blueprint to success. This document details
what the plan to do with the venture, and how exactly you want to achieve them. It also
details the most important questions you should ask yourself before, during and after your
business has been taken off: Where do I get my resources? What are the problems I
might encounter? What are the possibilities for expansion? Is there a demand in the
market for my product? It is your road map to your business", says Elizabeth Manuel,
chief of the Trade
In creating or searching to business opportunities, one must consider the following
factors:
1. The needs of the society
2. Availability of capital resources
3. Business inclination
4. Clientele
5. Availability of raw materials 6. Human Resources
7. Nature of product or service
BASIC PHASES OF BUSINESS PLAN
1. Management Structure and Component
It is designing the form of ownership of the business which at the outset is known
to the investors. It shall also define the organizational structure of the organization and
the operational system that must be put in place. It shall define the duties and
responsibilities of the people in the organizational structure. Management should
organize different operating departments and delegate corresponding authority.
2. Marketing and Distribution System
The Marketing and Distribution Study shall deal with product demand analysis. It
should show the competitive product advantage over existing product or service and
designing the marketing program of the enterprise. It should analyze market share and
system of promotion, distribution, advertising media and other marketing mix strategies
to ascertain product market acceptance and patronage.
3. Production and Technology
Production and Technology Studies refer to the need in making the product or
service. This refers to the machineries, plant location, and other technical aspect in the
making of the product. It shall describe the physical layout of the building and the
equipment that will be used in production. For services, it shall specify the equipment that
will be used and the manpower needed to render the activity.
4. Financial Management
The Financial Management aspect refers to the capital investment and sources of
funding the operation of the business. It shall show financial projections over a period of
one year and five years program and shall determine the rate of return on investments. It
must be able to show the return on equity and break-even sales as well as pricing
sensitivity test.
GENERAL FORMAT OF A COMPREHENSIVE BUSINESS PLAN
1. INTRODUCTION
The introduction contains the rationale and the background of the study undertaken. It
should include the importance of the project and the proponent's background and their
desire to establish the business.
II. PROJECT SUMMARY
A. Name of the Firm
B. Business Location
C. Brief Description of the Business
1. Brief history or how the business was organized.
2. Highlights of the findings in every phase of the business study.
III. MANAGEMENT AND PERSONNEL COMPONENTS
IV. MARKETING STUDIES
A. Market Profile
This refers to the market segmentation for the distribution of the product or service. The
study must cover the possible users of the product and how to reach the particular market
segments.
B. Demand Analysis
1. Projected consumption in the first year of operation, then Five years and Ten
years operation.
2. Major segment users of the product and their location.
C. Supply Analysis
1. Source of Product Supply
a. Foreign Suppliers.
b. Local Suppliers
2. Factor Analysis of the Past and Future Supply Chain.
D. Competitive Analysis
1. Selling Price-This refers to the selling price of the product.
2. Competitions - It refers to the competing product in the markets as to its quality
and market acceptability.
3. Distribution and Cost of Transportation - It refers to the transfer or movements
of products from the producer to the ultimate user. The usage of different vehicles
and ways to transport the product should be easily defined.
4. Channel of Product Distributions - A mean of reaching the target market or it is
the method or strategy to penetrate a particular market segment.
5. General Competitive Practice It is the analysis of how competitors distribute the
product to existing end users.
E. Program Analysis of Marketing Strategies
1. Geographic Segmentation Strategy- This refers to the place of target market and the
approaches to penetrate the market niche. 2. Psychographic Strategy - The educational
background and the lifestyle of target market.
3. Demographic Segmentation Strategy - It means the target market as sex, age, income
and the other personal factors of the target market.
4. Pricing Strategy - This has something to do with the price index of any pricing strategy
that will attract customers.
5. Channel of Distribution - The choices could be retailers, wholesalers, dealership,
franchise, or direct marketing. 6. Promotion and Advertising-Media network, personal
selling, billboard, or any media penetration strategy.
V. PRODUCTION
A. Product Specification - It tells about the product or service that the entrepreneur
will offer to its target market. It is an elaborate presentation of the properties of the
products and the benefits related therein. It is the service that will be offered to the
target consumer.
B. Production Process - It is the detailed layout of the production process as the
products goes into the production line indicating the flow process, materials and
equipment to be used and normal time table that the product will be finished.
C. Plant Rated Capacity - This refers to the volume of production per shift per day
or a monthly basis considering target market consumption. It must also make
projections for five years forecast and the technical factors involved.
D. Machinery and Equipment - It involves the kind of machine to be used, its
sources, spare parts, working guarantees, rated capacity per day, and the cost
estimates involved in its purchase.
E. Plant Location - A drawing or plant location and the vicinity map as to its
accessibility to supply or raw materials, and the transport of finished product to the
market. It must show advantages and other plus factors for employees and other
services.
F. Building and Facilities - It must describe the type of building that will be
constructed or sketch of the building plan, electrical plants, drainage, and other
utilities. It must contain the cost estimates involved and the total floor plan. G. Raw
Materials It deals with the raw material requirements and its specification, its
source, cost and terms of payment, availability and the possible long term supply.
It must also show alternative suppliers of other sources. H. Power Supply and
Utilities Utilities refer to the supply of electricity, water, and its availability in the
processing of the product. It also has to do with environmental disposal of waste
and compliance with government requirements. Drainage system has to comply
with sanitary requirements imposed by municipal and national laws.
I. Production Cost - This refers to the direct labor and administrative cost in the
processing the products. Unit cost must be computed as basis for pricing and
marketing strategies.
VI. FINANCIAL STUDIES
A. For New Business Venture
1. Total Project Cost - This has to do with the entrepreneur fixed cost and the
working capital in the operation of the business.
 2. Capital Investments Required.
3. Pre-operating cash flow and its relation to time table-financial projection for the
first year of operation, for the five-year operation in projected balance sheets and
income statements.
4. Supporting Schedules in the Financial Statements and Income.
a. Collection Period for Projected Sales or Revenue
b. Inventory Levels
c. Payments for Purchases and Expenses
d. Production Costing, Administrative Expense and Cost of Sales and other
Projected Financial Expenses.
5. Projected Financial Estimates showing return on investments, return on equity,
break-even analysis, price analysis.
B. For Existing Project
1. Audited Financial Statement - last 3 years
a. Balance Sheet
b. Income Statement
c. Cash Flow
2. Fixed Assets, Capital Investments, Depreciation used in Capital Assets.
3. Tax Assessment, Liabilities, and other Payables.
4. Financial Trends and Ratio Analysis.
5. Financial Cost for Administrative expenses, Production and Selling Expense.
6. Financial Projection for the Next Five Years.
7. Financial Analysis for Return of Investment, Return of Equity, Break even Analysis,
Production Volume and Price Analysis.

MICRO BUSINESS PLAN

The major objective of business plan is to assess, examine and analyze the
viability or feasibility of the study. A business plan is the ticket to success. It is also a
blueprint to success and document details what you plan to do with your venture, and
how exactly you want to achieve them. It is your road map to your business, according to
Elizabeth Manuel, Chief of the Trade Business Management Division of the government
run Philippine Trade Training Center.

Validate your business concept, instead of doing a business plan outright. Identify
the business SWOT, business planning begins before it has materialized on paper. Have
clear goals, your end goal must be clear to you and your team. Evaluate not only the
business idea but also your capacity to handle and nurture it.
A. Executive Summary

Synopsis of your business plan so ideally, this part should be written last in order
to include all the necessary information and target points of the document. You must
possess the ability to predict the financial path of your venture in correlation to the present
economy. If your external analysis tells you what you can and cannot do, your internal
analysis tells you what you are able or not able to do.

B. Marketing Plan

Push or pull, you must be able to tell how fast or slow your product will move in the
market, whether it would make use of a push or pull strategy or both. The push strategy
tells how I will move my products to the marketplace, while the pull strategy tells how I
will make customers ask for my product. The pull strategy promises, the push strategy
outlines what makes the business stay.

C. Operations Plan

Ernesto Pineda, director of the UP, Institute of Small-Scale Industries, defines the
operations plan as the company's expected sales for the coming year and the costs of
running the business in general. It keeps track of the business performance for its
conception down to its purchase. Determining the number of people to hire to keep your
perspective business running smoothly is also a must. Managing your inventory and
computing the production costs are crucial at this point so you can project possible profits,

D. Financial Plan

According to Dr. Ferreria, "Your financial plan must show how much money is
needed to generate sales; how much is going to be spent on a particular item, and how
much will be borrowed and paid." The income statement describes your company's ability
to generate cash by computing for sales and expenses. The balance sheet shows your
financial condition by accounting for your assets (cash, receivables, inventory, equipment,
property, investments) and liabilities (accounts payable, salaries, taxes, and bonds, notes
and mortgage payables.)

GENERAL FORMAT OF A COMPREHENSIVE BUSINESS PLAN

I. INTRODUCTION

The introduction contains the rationale and the background of the study undertaken. It
should include the importance of the project and the proponent's background and their
desire to establish the business.

II. PROJECT SUMMARY

A. Name of the Firm

B. Business Location
C. Brief Description of the Business
1. Brief history or how the business was organized.
2. Highlights of the findings in every phase of the business study.
III. MANAGEMENT AND PERSONNEL COMPONENTS

IV. MARKETING STUDIES

A. Market Profile - This refers to the market segmentation for the distribution of the product
or service. The study must cover the possible users of the product and how to reach the
particular market segments,

B. Demand Analysis

1. Projected consumption in the first year of operation, then Five years and Ten
years operation.

2. Major segment users of the product and their location.

C. Supply Analysis

1. Source of Product Supply

a. Foreign Suppliers:
b. Local Suppliers

2. Factor Analysis of the Past and Future Supply Chain.

D. Competitive Analysis

1. Selling Price - This refers to the selling price of the product. 2. Competitions - It
refers to the competing product in the markets as to its quality and market
acceptability.

3. Distribution and Cost of Transportation It refers to the transfer or movements of

products from the producer to the ultimate user. The usage of different vehicles
and ways to transport the product should be easily defined.

4. Channel of Product Distributions - A mean of reaching the target market or it is

the method or strategy to penetrate a particular market segment

5. General Competitive Practice - It is the analysis of how competitors distribute

the product to existing end users,

E. Program Analysis of Marketing Strategies

1. Geographic Segmentation Strategy-This refers to the place of target market

and the approaches to penetrate the market niche.
2. Psychographic Strategy - The educational background and the lifestyle of
target market.
3. Demographic Segmentation Strategy - It means the target market as sex age,
income and the other personal factors of the target market.
4. Pricing Strategy - This has something to do with the price index of any pricing
strategy that will attract customers.
5. Channel of Distribution - The choices could be retailers, wholesalers,
dealership, franchise, or direct marketing.
6. Promotion and Advertising-Media network, personal selling, billboard, or any
media penetration strategy.
V. PRODUCTION

A. Product Specification - It tells about the product or service that the entrepreneur will
offer to its target market. It is an elaborate presentation of the properties of the products
and the benefits related therein. It is the service that will be offered to the target consumer.

B. Production Process - It is the detailed layout of the production process as the products
goes into the production line indicating the flow process, materials and equipment to be
used and normal time table that the product will be finished.

C. Plant Rated Capacity - This refers to the volume of production per shift per day or a
monthly basis considering target market consumption. It must also make projections for
five years forecast and the technical factors involved.

D. Machinery and Equipment - It involves the kind of machine to be used, its sources,
spare parts, working guarantees, rated capacity per day, and the cost estimates involved
in its purchase.

E. Plant Location - A drawing or plant location and the vicinity map as to its accessibility
to supply or raw materials, and the transport of finished product to the market. It must
show advantages and other plus factors for employees and other services.

F. Building and Facilities – it must describe the type building that will construct sketch of
the building plan, electrical plants, other utilities. must contain the estimates involved the
total floor plan. specification, source, cost terms payment, availability possible long-term
supply. must also show alternative suppliers of other sources.

H. Power Supply and Utilities – utilities refer to the supply of electricity, water, and its
availability in the processing of the product. It also has to do with environmental disposal
of waste and compliance with government requirements. Drainage system has to comply
with sanitary requirements imposed by municipal and national laws.

I. Production Cost – this refers to the direct labor and administrative cost in the processing
the products. Unit cost must be computed as basis for pricing and marketing strategies.

VI. FINANCIAL STUDIES

A. For New Business Venture

1. Total Project Cost – this has to do with the entrepreneur fixed cost and the working
capital in the operation of the business.
2. Capital Investments Required
3. Pre-operating cash and its relation to time table – financial projection for the first
year of operation, for the five-year operation in projected balance sheets and
income statements.
4. Supporting schedules in the financial statements and income.
a. Collection period for projected sales revenue
b. Inventory levels
c. Payments for purchase and expenses
d. Production costing, administrative expense and cost of sales and other
projected financial expenses.
 5. Projected financial estimates showing return on investments, return on equity,
break-even analysis, price analysis.

B. For Existing Project

1. Audited Statement – last 3 years

a) Balance Sheet
b) Income Statement
c) Cash flows

2. Fixed Assets, Capital Investments, Depreciation used in Capital Assets

3. Tax Assessment, Liabilities, and other Payables.
4. Financial Trends and Ratio Analysis.
5. Financial Cost for Administrative expenses, Production and Selling Expense.
6. Financial Projection for the Next Five Years.
7. Financial Analysis for Return of Investment, Return of Equity, Break even
Analysis, Production Volume and Price Analysis.

DESCRIPTION OF THE TARGET MARKET

1. Distinguish or determine the consumer from the customer.

2. Enumerate the benefits of the proposed product to the target markets
3. How and why should the target market buy the product or service? 4. Is there
any potential to increase the target market?

Business-to-Business (B2B) markets include

1. Target market-enterprise:
2. Frequency of product purchase:
3. Tendency for replacement needs versus expansion purchasing process; and
4. Estimates of market size, initial targeted geographic area, enterprise's targeted
market share.

Business-to-consumer (B2C) markets include:

 Demographic factors, such as income level, age range, gender, educational level.
 ethnicity of the target market;
 Psychographic factors of the target market; and
 Behavioral factors such as frequency of product purchase and shopping behavior
of the target market.

Example:

The target market of the said business is located at with the total population of and its
female population is The women from adolescent to late adulthood are the target market.

Then, provide a description of adolescent and adult demographic, psychographic and

behavioral factors
CATEGORIES OF CONSUMER

1. Price Shoppers - This group is interested in the best deal for a product. They
are commonly called as PRAKTIKAL and price conscious.

2. Brand-Loyal Customers - This group believes that their present brands are
superior to others and are willing to pay fair prices for products just to acquire it.

3. Status Seekers - People who are interested in prestigious or called (signature)

brands or known product categories and willing to pay at any price.

4. Service or Feature Shoppers-This group seeks a high value on customer service

and product features and will pay for them.

5. Convenience Shoppers - People who value nearby locations, long store hours
and are willing to pay for easier shopping.

MARKET NEED ANALYSIS

In analyzing the market need, the following questions should be asked?

1. Who will get interested in my product?

2 What does the market need or want?

3. Who is buying the product? what and how much? or how, where and why are they
buying those goods or services? Determining the marketability of the business is typically
done in the context of creating a business plan and performing an analysis of the
competition. It requires. research in the areas of marketability. Consider whether the
business offers a new. solution to an old problem or complements an emerging trend.
Untapped markets that are profitable are few. Understand the benefits that the product or
service offers compare to others. Focus on 'benefits of what your product or service does.

MARKET ANALYSIS

A market analysis is a quantitative and qualitative assessment of a market ability to

respond positively. It looks into the size of the market both in volume and in value, the
various customer segments and buying patterns, the competition, and the economic
environment in terms of barriers to entry and regulation in the industry.

HOW TO DO A MARKET ANALYSIS?

This is to show to the investors that the company knows its target market. It is large
enough to build a sustainable business.

The following activities can be recommended:

1. Demographics and Segmentation

Demographics is the statistical characteristics of human population (as age or income)
used especially to identify markets; a market or segment of the population identified by
demographic..
Segmentation is the process of dividing into segments with similar characteristics.
Markets are needed to slice it into different segments. This is especially relevant if
competitors focus only on certain segments. It can be segmented through its size (number
of potential customers) and the value of the market. Estimating the market value is often
more difficult than assessing the number of potential customers.

2. Target Market

This is the type of customers that are focused within the market. It is focused on the more
qualitative side of the market analysis by looking at what drives the demand.

3. Market Need

Investors must determine the needs of the market through analysis based from research
conducted focusing on their needs. Identify what the customer wants to classify their
needs.

4. Competition

Determining the competitor's positioning and describe their strengths and weaknesses.
Analyze competitors' angle to the market in order to find a weakness that company will
be able to use in its own market positioning. One way to carry the analysis is to benchmark
the competitor against each of the key drivers of demand for the market (price, quality,
add-on services, etc.) and present the results in a table.

SAMPLE BUSINESS PLAN

FORMAT OF BUSINESS PLAN (Prescribed by PUP Santa Mesa Campus)

L Executive Summary
II. Background & Business Concept
III. Description of the Business
IV. Vision and Mission for the Business
V. Marketing Plan
a. Product
b. Price
c. Place
d. Promotion
VI. Sales and Production Plan
VII. Business Requirements
a. Staffing and Cost
b. Business Organization
C Equipment Requirement
d. Space Requirement
e Manufacturing Processes
f. Plant Location
g. Material Cost
h. Other Cost:
Rent and Utilities
Transportation Office Supplies
Store Supplies
Sanitary Supplies
 Pre-operating Expense
Repairs and Maintenance
Fringe Benefits
Miscellaneous Costs
Utility Cost
Office Equipment
Furniture and Fixtures
i. Depreciation
j. Investment
VIII. Sales Costs
IX. Financial Aspect
a. Income Statement
b. Cash Flow
c. Balance Sheet
d. Financial Analysis

X. Conclusion- Intent Schedules

Projected time table (Gantt chart)

VI. Assessment Tasks

Essay:

1. Describe the different parts of business plan.

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2. Fully discus the stages in business start-up process.

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Rubric for essay: /10

Identification of main issues or topics /1
Analysis /5
Solutions/ Answer to questions /2
Readings and Research /1
Spelling and grammar /1

VII. Other reading materials or sources

Messenger
Google Classroom
Google Meet
PowerPoint Presentation